Suppose that a factory is located on the outskirts of a small town. As a by-product of its production process, it produces sulfur dioxide that gets released into the air. The sulfur dioxide lowers the quality of the in the town
Suggest some possible remedies for this negative externality.
The first possible remedy for this negative externality would be a corrective tax set equal to the cost that the externality imposes on others. This would reduce output (and hence sulfur dioxide emissions) and give individuals the proper incentives to come up with innovative ways to reduce future emissions. A second possible remedy for this negative externality would be regulation requiring that the factory reduced emissions to the optimal level. A third possible remedy would be to create marketable pollution rights in sulfur dioxide emissions.
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Using the data in the table above, the equilibrium quantity and equilibrium price for a cellular telephone is
A) 50,000 and $100. B) 80,000 and $80. C) 60,000 and $50. D) 40,000 and $20. E) 100,000 and $20.
If the newspaper reported that wearing plaid clothing was a sure way to obtain good grades, students'
A) budget lines would shift rightward to compensate for the higher price of plaid clothing. B) budget lines would rotate so that more plaid clothing would be purchased. C) preferences would change in favor of more plaid clothing. D) none of the above
Is each of the following situations an example of savings, investment, or neither? In each case explain your choice
(a) A savings and loan association lends money for the purchase of "junk" (not backed) bonds. (b) John's income is $25,000 per year; $22,000 is spent on consumer goods and the remaining money is used purchase stock in the local electric company. (c) Just before retirement a couple sells their shares of Pacific Bell stock and puts the proceeds in a bank savings account. (d) The city of Los Angeles rebuilds highways after an earthquake. (e) In order to improve the income earning potential of current welfare recipients, the federal government increases the size of income transfers.
Large barriers to entry exist in which of the following market structures?
A. Perfect competition only B. Perfect competition and monopolistic competition C. Oligopoly and monopoly D. Monopoly only